Liquidity has been a prominent issue within the digital asset space. No matter the digital asset, liquidity is essential. Market volatility occurs when liquidity is insufficient, causing overhead costs for digital assets to rise.
With the complexities of exchanges and the often volatile nature of digital assets, not having the ability to quickly and efficiently convert or trade can become a real issue.
Even with sufficient liquidity, trading can be costly due to gas and trading fees, making it even more cumbersome.
However, as the space progresses, so too do the solutions for tackling the liquidity problem.
Mangata is an accessible and secure decentralized exchange (DEX) app chain built on Polkadot. Mangata’s DEX prevents front-running and maximal extractable value (MEV), offers on-chain limit orders, and is highly efficient thanks to its unique Proof-of-Liquidity consensus mechanism that reuses liquidity to ensure chain security.
The Kusama DEX offers secure decentralized trading in Polkadot, Kusama and Ethereum while also being the first production-ready Layer-1 DEX blockchain that prevents price manipulation and MEV.
To further improve the trading process and help with liquidity, Mangata eliminates gas fees for traders. Without gas fees, users can benefit from a faster settlement at no additional cost and afford more sophisticated strategies like Dollar-cost averaging.
Mangata has recently raised a $4.2 million equity round, leading to the company’s market value sitting at $60 million. This round of funding occurred following the launch of its first blockchain on the Kusama network. The Kusama DEX closed a crowdloan, a mechanism to vote chains into the ecosystem, in under 50 minutes, breaking records in the process.
More on Mangata’s DEX
The Mangata platform is looking to address some of the most significant issues within the space – high Ethereum gas prices, bots stealing from users, and antiquated design philosophies are all focus areas for the DEX. The DEX is also looking to alleviate the expensive, prohibitive, and unfair practices many contemporary exchanges have.
Mangata’s next-generation DEX makes tokens from any ecosystem tradable on a single exchange and features gasless swaps, making it the optimal choice for traders and those looking for liquidity.
The Kusama DEX also provides additional security, preventing front-running and MEV without extra fees. The DEX’s consensus layer makes front-running impossible, preventing bots from stealing from traders, a problem with many blockchains.
To promote the progress of both exchanges and DEXs, Mangata isn’t bound by legacy restrictions and can optimize from the ground up for capital efficiency and fairness.
Mangata’s Proof of Liquidity Mechanism
Mangata’s outstanding feature, Proof-of-Liquidity, helps it stand out from other DEXs and provides a safer way to trade, stake, and farm yield.
Proof-of-Liquidity is a novel consensus mechanism that takes the typical Proof-of-Stake structure and removes locked capital.
Unlike Proof-of-Stake, which has you stake a single asset, usually the network’s native token, with Proof-of-Liquidity, you first obtain liquidity tokens which you then stake. These include assets like Polkdot’s DOT or Parachain tokens like ACA or GLMR.
What they have labeled their “Stake Once, Earn Twice” feature allows staked assets to be reused as liquidity, creating deeper liquidity pools, increasing capital efficiency, and doubling rewards for stakers.
Every staking asset is paired against MGX, creating stakeable LP tokens. This process ensures governance is making decisions based on security affecting MGX and the stake.
LP tokens are staked with nodes and then automatically used in the corresponding liquidity pool, keeping them liquid. Rather than capital being locked, the stake will remain working as unlocked liquidity.
The Proof-of-Liquidity mechanism was designed to be simple and accessible while also creating a liquidity base layer that makes innovative, fresh use cases on the Mangata DEX-chain.
With this fresh take on DEXs, many other competitors will surely take notes and adapt, leading to a more liquid space and doing away with high gas fees.
Mangata is building a community-driven blockchain to ensure its DEX is for the people and by the people.